Canada hotels recorded double-digit RevPAR growth in October
Friday, 24th November 2023
Source : STR

Following seasonal patterns, Canada’s hotel performance fell month over month, but continued a stretch of year-over-year growth.

October 2023 (percentage change from October 2022):

  • Occupancy: 68.1% (+2.2%)
  • Average daily rate (ADR): CAD196.25 (+8.8%)
  • Revenue per available room (RevPAR): CAD133.57 (+11.2%)

“Following three months of single-digit, year-over-year growth, RevPAR grew double-digits for the first time since June,” said Laura Baxter, CoStar Group’s director of hospitality analytics for Canada.

“Full-service and urban hotels performed particularly well, with weekday occupancy in downtown Vancouver exceeding 2019 levels for the first time since March. There was also growth in group demand compared to the last few months, but despite improvements, the segment remains below average levels. The silver lining is group rates, which are up 26% compared to 2019, were stronger than the transient rate index for the first time.

“Higher occupancy this year has driven revenue across all departments within full-service hotels. But higher occupancy and elevated costs are eroding margins achieved last year when leaner hotel operating models were combined with strong ADR growth. This year, inflated costs are lowering margins, particularly undistributed expenses and higher wages.”

Among the provinces and territories, Nova Scotia recorded the highest October occupancy level (75.0%), which was 6.3% below 2022.

Among the major markets, Vancouver saw the highest occupancy (77.7%), which was 0.1% ahead of October 2022.

The lowest occupancy among provinces was reported in Prince Edward Island (56.0%), down 25.8% against 2022. At the market level, the lowest occupancy was reported in Edmonton (+10.1% to 59.5%).

“Our just-released forecast for 2023 was upgraded once again as rate growth surpassed expectations,” said Baxter. “We have also lifted ADR projections slightly for 2024, at 1.8%, while occupancy growth is forecasted to be more marginal at 0.4%. This is despite a 0.4% GDP contraction expected to occur as people continue to prioritize travel against the backdrop of muted hotel inventory growth.”

CoStar is a leading provider of online real estate marketplaces, information, and analytics in the property markets. For more information about the company and its products and services, please visit www.costargroup.com.

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